Deflation in November 2014

Singa­pore has its neg­at­ive infla­tion, i.e., defla­tion, after 5 years from the last defla­tion in Decem­ber 2009 amid the glob­al fin­an­cial crisis. The con­sumer price index was -0.3% in Novem­ber 2014 over Novem­ber 2013, mainly due to lower COE prices, fall­ing accom­mod­a­tion costs and cheap­er crude oil. In fact, private road trans­port fell 7% in Novem­ber 2014 over Novem­ber 2013, while accom­mod­a­tion costs declines 1.2% amid a soften­ing rent­al mar­ket.

How­ever, the core infla­tion, which excludes the costs of private road trans­port and accom­mod­a­tion, was up 1.5% in Novem­ber 2014 over Novem­ber 2013. Food infla­tion was up 2.9%, due to increases in non-cooked items and pre­pared meals. This is due to the high wage costs amid the tight labour mar­ket.

Experts have fore­cast the core infla­tion in 2015 to aver­age between 2% to 2.5%, while the head­line infla­tion will be between 1% to 1.5%.